While some analysts believe that legacy automakers will likely slow down their Electric Vehicle (EV) productions after Trump’s election victory, Volkswagen (VWAGY) (VW) is out to prove differently. In fact, the firm has increased its investment in EV manufacturer Rivian (RIVN) to $5.8 billion and launched a joint venture with it to develop electric vehicle tech and software. As a result of this announcement, Rivian’s stock rose nearly 8% in after-hours trading.
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This partnership will use Rivian’s tech to power future EV models for both companies and cover all types of vehicles. Volkswagen plans to invest $5.8 billion by 2027, beginning with a $1 billion convertible note and continuing with $1.3 billion for intellectual property licenses and a stake in Rivian. Additionally, VW has committed up to $3.5 billion in future equity, notes, and debt, with these funds tied to specific development milestones as the partnership progresses.
The new joint venture is called Rivian and VW Group Technology LLC and will be led by Rivian’s Chief Software Officer, Wassym Bensaid, and VW’s Chief Technical Engineer, Carsten Helbing. The team aims to release Rivian’s R2 model in 2026 and possibly VW models by 2027.
Is RIVN Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RIVN stock based on eight Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 35% decrease in its share price over the past year, the average RIVN price target of $16.67 per share implies 57.6% upside potential.
